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Payments: Paying here, there and everywhere

With a universally adopted online payment system yet to emerge, etailers must work hard to offer customers the options they demand.

As consumers continue to flock online and to their mobile phones in droves, a range of online and mobile payment options have emerged to cater for retailers moving to an omnichannel business model.

There are plenty of established businesses, including Visa, PayPal and Google, and lesser-known players, such as Monetise and Ingenico, offering compelling new payment options for retailer and consumer alike. Yet a universal, leading payment option has yet to emerge that crosses the sales channels and offers the consumer real ease of use.

Within the connected world of omnichannel, mobile appears well placed to offer a key role in payment, for online and in store too, with IT analysts Gartner predicting there will be more than 448 million mobile payment users globally by 2016. Mobile can potentially offer consumers a single way to pay and redeem offers quickly, easily and conveniently across all channels. In turn, fashion retailers could then make better use of targeted offers and other marketing activity, and provide a more seamless customer experience, as well as making it easier for retailers to track customer activity.

Mobile’s presence in store is also growing, with many shops already offering free Wi-Fi and adding QR codes to products to enhance the store experience, but with the exception of a few early adopters, including Aurora Fashions, Pretty Green and Thomas Pink, few fashion businesses have fully explored mobile as a payment option in store.

Whether paying online, on mobile or on a mobile while in store, questions remain: which payment methods should fashion retailers offer customers online and how do they choose what mobile payment methods are right for their business? Our experts consider the options.

Natasha Toothill

Head of retailer engagement at payments provider Visa Europe

Natasha Toothill

Natasha Toothill

By 2020 we think 50% of Visa transactions will be on a mobile phone. We talk about contactless plastic as a stepping stone for mobile. I was talking to a big fashion retailer and they were saying contactless payments aren’t part of their business, as their average transaction is £30 and contactless is for payments under £20. Mobile can process a payment over that maximum amount. You would put your pin into your phone and then tap and go. It’s the same customer behaviour as Chip & Pin except you do everything on the mobile and then get the receipt on the phone.

Ecommerce was our fastest-growing payment channel [at 16%] in 2012 and now 20% of our business is on ecommerce. To help improve checkout abandonment rates, which we hear are at 60% if you have a non card-on-file checkout solution [online or mobile], we’re trying to minimise what the customer does in regards to payment, as checkout online can be quite tiresome to key in card and address details. Our V.me wallet [launching later this year] securely stores those details.

Carl Tsukahara

Chief marketing officer at payments provider Monetise

Carl Tsukahara

Carl Tsukahara

Some businesses try to take the big browser experience and simply shrink it down to the small screen [for mobile], and that is a terrible flaw. For customer experience, one of the key things is doing the right thing in the right channel. You can offer similar services but the way you execute them has to be device and channel appropriate.

If you don’t simplify the user experience in mobile, [your sales conversion rate] is not going to be as good. You can’t expect people to type forms and forms of checkout pages on a mobile screen. You will have a higher abandonment rate when you make it hard for the consumer. We like the idea of pre-enrolling users as it makes the customer experience easy and businesses can give consumers added value through merchandising and offers through the channel.

Mobile payment also allows retailers to bridge the physical and interactive worlds. People can use an app [such as SimplyTap] to scan a printed ad that will instantly take them to the checkout. With adverts the consumer usually sees the ad and has to remember it, then go somewhere else for the point of purchase.

Nadine Sharara

Head of ecommerce at shirt retailer Thomas Pink

Nadine Sharara

Nadine Sharara

It’s important to give customers choice and to offer options that people are actually using. The challenge is picking, from a mobile point of view, the ones you think are going to get some traction in the market and add value for a customer.

There are a proportion of our customers that use PayPal via our website and we do have it integrated so they can use it on mobile in store, but it’s not an incentive for customers who don’t already shop with it.

We also have a branded instant mobile checkout app [via Monetise’s Simply Tap] that sits independently from the website [and the store]. One of the barriers to shopping on a mobile device is typing all the information required at checkout. This has the simplicity of the customer registering once, and then each time after they just put in the security pin number to charge the bank account.

Nobody really knows who is going to become the Google of mobile payment. SimplyTap might not be the one we end up with in five years but that’s fine. We can adapt as needed.

Having a branded app allows us to maintain the high standard and quality inherent with our brand. The app has the Thomas Pink fascia and we’ve put some customisation in there. We can also provide unique offers to incentivise downloads for example, or mobile marketing offers. It also allows us to be targeted in terms of offers we do. That’s important because offers need to be relevant to the consumer.

John Bovill

Commercial director at womenswear chain Jacques Vert

John Bovill

John Bovill

For me it’s about understanding the market and the customer and offering the relative payment types. That’s got to be prevalent in any payment solution considered.

For us [traditional credit card options and PayPal] is where our customers are at. About 18% of our sales come through PayPal and it’s growing.

We are a considered purchase business, a premium business, so people would just use another tender type if we didn’t have it, though I think it helps provide a more seamless experience for the customer.

We’ve recently been busy moving our websites onto the IBM Websphere. We’ll be doubling the size of our ecommerce business between now and 2015/16 and you need the appropriate platform to deliver that growth. It’s not truly mobile optimised, but that’s one of our plans for this year.

When I was at Aurora Fashions we had [PayPal] optimised within the mobile device [to use in store]. For younger brands, particularly Oasis and Warehouse, it’s much more appropriate to the customer journey and that’s what it’s all about: providing appropriate fit for purpose solutions for your customer. For instance you’d have gift vouchers that you can redeem in store via mobile, which were hugely successful. We knew customers were bringing mobile devices into the stores and had to ensure our brand continued to be relevant to them.

When you’re a multiple retailer you need to adopt the right technology for your customer and provide a seamless, joined-up experience. You can’t afford for your offer to be fragmented.

Tim Kalic

Head of digital at menswear brand Pretty Green

Tim Kalic

Tim Kalic

We try to ensure our customers can pay in the most convenient way for them. Currently Pretty Green offers
a wide range of traditional card payment options, plus PayPal.

However, payment processing is an industry that is ripe for disruption. Not much has changed in the past decade. Large corporates like Visa and Mastercard recognise this and are both working on modern solutions.

We evaluate what options are available, and what our customers are using elsewhere. Things are changing and it’s just a matter of time before mobile and instant payments become widely adopted. We aim to be at the forefront of this payment revolution.

Pretty Green has a mobile-optimised checkout on the website, and we offer instant mobile payments via Monetise.

We are learning a lot from experimenting with mobile payments so early on.

Checkout is the lynchpin of ecommerce, and most retailers are playing catch-up to the leaders of instant payments, Apple and Amazon. Due to these retailers’ wide reach, customers’ expectations are being set. Anything beyond an extremely simple procedure is becoming laborious.

Mobile payments are about speed and convenience, which is key in standard online payments and in store. The solution we are working towards isn’t just confined to the mobile space, it will be the primary method of payment with Pretty Green. We are working with several exciting start-ups in the mobile payments space on a solution that will enable us to offer customers a fast, secure and easy payment method, no matter where they place their order.

Tom Rooney

Development manager, mobile at department store John Lewis

Tom Rooney

Tom Rooney

It’s important to offer a range of payment options to give customers convenience and choice. Investing in marketing and conversion optimisation will be wasted if your customer’s preferred payment methods are not available.

Johnlewis.com offers PayPal as well as traditional credit card options. Our mobile website offers all the payment methods that are on our desktop site, including gift vouchers and PayPal, which is particularly popular on mobile.

Customers can also pay with our Partnership Card, by earning reward points that are converted to Partnership gift vouchers that can be spent online too. Through the Partnership card we gain visibility of customers’ behaviour across our business. We use a combination of provider (HSBC) data and the data from our till system to build a single view of an individual cardholder, and then use this data to gain business insight and for marketing.

Our customers don’t see divisions between sales channels so expect the full offer to be available regardless of how they shop. We know customers use their mobiles in store. Our mobile app allows them to scan items for more information and to compare products online. Allowing customers to purchase goods in store via their mobile is an area we are looking into.

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